Best Financial Practices for an Organization

In the past month, I have slowly adjusted to working a new job at a non-profit. I am currently working in Operations for a small organization and so it means that I am in charge of any and all of the day-to-day items. This includes both website maintenance and also finances. Good thing I have a CIS degree. One of the tasks that I was given is looking into different options for Corporate Bank Accounts, and assessing whether we can transfer our accounts to a different bank to save money. I’ve also been looking into corporate credit cards as well. While I’m not the one crunching the numbers and comparing our Quickbooks accounts, I have come to learn important practices for businesses if they are going to keep everything in order.

Keep All Receipts

Keeping track of all expenses and income is important for your household budget, but it’s vitally important for running a business or organization. As an organization, you will likely have an accountant or bookkeeper keeping track of your financial information and therefore the need for this paper trail is extremely important. This information will also be useful when it comes time to prepare your tax reports.

Staying Up to Date

Sometimes keeping a paper trail can mean that you get bogged down with some of the day to day items. Too many expenses within a short period or too much revenue can mean that you are struggling to keep up. Yet, this is important too. Falling behind in tracking your money going in or out can mean that you don’t have an accurate picture of current finances. This could mean over estimating how much money you have OR underestimating. Both can be huge mistakes.The simple truth is that in order to make informed decisions when running an organization, you need an up-to-date picture of your financial situation and this only happens by staying up to date. There are many resources out there that can assist your with the financial part of your business. A factoring company is a reliable resource when you have questions and need the support.

Clear Roles and Responsibilities

The last thing that any organization or business needs to do in order to carry out best practices is to have distinct and clear roles when it comes to managing the financial picture. This means that two people should not be involved in processes where one person would suffice. Having two people involved unnecessarily may mean that something falls through the cracks or is lost in a convoluted process. The best thing to do, in order to ensure that everything gets done, is to clearly define who is doing what so that there is no confusion and everything gets processed.

Running an organization successfully take a little bit of planning to make sure that it is going to survive financially. It doesn’t take an advanced degree, but not every single person can do it well.

One Response to Best Financial Practices for an Organization

  1. What’s interesting is that all these pieces of advice also apply to our own personal financial lives as well. Keeping receipts or records, getting a financial picture of where you are, etc, are all things that can help keep you on track and determine how much money you can comfortably allocate to your savings goals.

    As a manager at my own place of work, I also find that sometimes it is difficult to make sure that everyone is buying into these fundamentally important tasks. Without a solid balance sheet, a company, whether for profit or not, cannot function to the best of its abilities. And that can not only hurt every employee, but also the growth potential of the company itself.